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MLB Salary Floor: It’s Time to Fight Tanking With a Minumum Payroll

Last Updated: December 5, 2022
If you have no desire to spend money and win, why even bother? Major League Baseball doesn’t have a salary cap, but it absolutely needs a salary floor.

However Major League Baseball’s new collective bargaining agreement was going to look, it was supposed to end tanking, we were told.

After a 99-day lockout, a few key changes went into effect with some bearing on that mythical thing called “competitive balance”:

  • The postseason was expanded to 12 teams
  • A six-team draft lottery was instituted to ensure that all 30 teams remain competitive
  • Teams that are revenue-sharing recipients can’t be in the lottery more than two years in a row
  • Teams that pay into the revenue-sharing pool can’t receive a top-six pick in consecutive seasons
  • A full year of service time will now be awarded to players who finish in the top two in Rookie of the Year voting
  • Additional draft picks will be granted to teams who promote players on opening day who finish in contention for major end-of-season awards.

Meanwhile, the 30 MLB owners (naturally) made sure the Competitive Balance Tax (a fancy word for baseball’s luxury tax) would stay in place to punish teams who spend too much, including a new tax bracket more or less aimed at New York Mets owner Steve Cohen. The players union did well in raising the team tax threshold from $230 million this year to $244 million in 2026.

But do you know what wasn’t added to the new CBA that baseball could desperately use in this regard? A team salary floor.

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A minimum payroll threshold — not just a draft lottery and not just a soft cap — would be this current MLB era’s strongest bulwark against tanking. The fact is that there are teams whose owners will always prioritize profitability over wins, a middle finger to fans across the country and one of the many reasons why baseball continues to wane in popularity in the United States. If we’re not taking steps to fight this, we may as well be endorsing it.

On that note, let’s talk about Cincinnati.

The Reds won 85 games last year and were on pace to be a playoff team in 2022. But here’s what they turned around in did in the span of two days:

  • Traded pitcher Sonny Gray and his $10.2 million contract to the Minnesota Twins for a prospect
  • Traded All-Star outfielder Jesse Winker (who’s due to receive an estimated $7 million in arbitration) and star third baseman Eugenio Suarez ($48 million left on his deal) to the Seattle Mariners for lefty starter Justin Dunn, outfielder Jake Fraley, and a prospect.

Cincy managed to reduce its payroll by $27 million… and take itself out of playoff contention this year. Unfortunately, that was literally the point. And with no salary floor, there’s no way to prevent it.

The Oakland Athletics have performed artful versions of this over the past couple of decades, though they’re far better at remaining competitive with a low payroll. In just the last three days, the A’s offloaded All-Star righty starter Chris Bassitt (and his projected $8.8 million in arbitration) to the New York Mets for prospects and superstar first baseman Matt Olson and his projected $12 million to the Atlanta Braves for four top prospects, including outfielder Christian Pache and catcher Shea Langeliers.

According to Spotrac, the Cleveland Guardians, Pittsburgh Pirates and Baltimore Orioles currently sport payrolls under $36 million — that’s less than what Max Scherzer, Mike Trout, Anthony Rendon, Jacob DeGrom, and Gerritt Cole will each make in 2022 alone. The Miami Marlins’ resistance to adding competitive players like outfielder Nick Castellanos is reportedly a reason why Derek Jeter quit his job as CEO and sold his stake in the team.

If you’re an owner that has no desire to spend money to win, why even bother buying into the league to begin with?

Notably, the NBA and NHL have salary floor models MLB can emulate. Though both are salary cap leagues with hard limits on payroll, the NBA has a $101.173 million floor against a $112.414 million soft cap (luxury tax threshold) and a $143.002 million hard cap (“luxury tax apron”). The floor is effectively 90% of the soft cap and 70% of the hard cap.

The NHL has a floor of $60.2 million and a cap of $81.5 million — the former approximately 74% of the latter.

If hockey can have an incredibly modest $60 million salary floor, why can’t baseball? While still laughably low, enforcing a $60 million MLB payroll minimum (about 25% of the CBT threshold) means five teams would still hypothetically be out of compliance as of this writing.

But this isn’t hockey — we could easily inaugurate the salary floor at $70 million (about 29% of the luxury tax line) or $81.33 million (one third of the tax line) and increase in proportion with the CBT. Alternatively, it could be calculated it as a function of league revenues.

If you really want to curtail or stop MLB tanking in its tracks, make all 30 owners actually spend money on the product its fans pay their hard-earned money to go out and see.

Tanking in baseball is alive and well despite the new CBA. Until something is done to get every owner to spend money to try and win games, this practice will continue to drag down the sport season by season as it loses ground on other leagues.

Baseball can’t simply spend its way back into nationwide popularity and cultural relevance. But if it wants to stand a chance, there are far worse places to start than establishing a bare-minumum payroll.

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